The Pluralist Corporation

Abstract

This Thesis extends Sir Isaiah Berlin’s ‘value pluralism’ to argue that the for-profit corporation functions as a powerful, constructed ethical agent. While the prevailing view is that corporate decision-making allows for the balancing of a range of different, potentially competing interests, this Thesis argues that the corporation’s ethical agency is structured around a single, unifying value, namely, the corporation’s own financial self-interest. On this view, the corporation’s decision-making is constrained: it is incapable of a) conceiving of the world in anything other than financial terms or b) other-regarding behaviour of any kind. The pervasive financial self-interest evident in the corporation’s constructed ethical agency helps to explain both the remarkable success of the corporate form, and its pronounced anti-social tendencies. This Thesis argues for a reconfiguration of the corporation, and with it, corporate ethical agency. In particular, it argues that the nature and scope of corporate influence necessitates imbuing the corporation with more ‘pluralist’ sensibilities. Not only should the corporation be capable of balancing a range of different interests in its decision-making, it should be capable of subordinating its own interests to those of the broader community where appropriate. Using Berlin’s value pluralism as a guide, this Thesis proposes a suite of law reforms aimed at facilitating contextualised, flexible, and other-regarding decision-making on the part of the corporation. These proposed reforms are: – replacing the existing duty to act ‘bona fide and the best interests of the corporation’ with a new duty to ‘sustain the business of the corporation as a going concern’; – providing a statutory definition of ‘proper purpose’ with a view to both expanding the concept, and ensuring that it functions as the ‘lodestar’ for directorial decision-making. With respect to the proposed expansion, the concept of proper purpose should be made to include a good faith requirement, and should also allow directors to address legitimate social and environmental issues; – providing express statutory permission for corporations to engage in profit-sacrificing behaviour; – mandating integrated reporting mechanisms for corporations, with a view to using the data collected to inform the development of a ratings system for corporate conduct; and – legislating for advisory shareholder resolutions.